SEC invites comments on Unikrn distribution plan
The Division of Enforcement has submitted to the Securities and Exchange Commission (SEC) a proposed plan of distribution for the distribution of the $6.1 million fine paid by Unikrn back in 2020.
Let’s recall that, in September 2020, the Commission announced charges against Unikrn Inc for conducting an unregistered initial coin offering (ICO) of digital asset securities. Unikrn agreed to settle the charges by paying a $6.1 million penalty, substantially all of the company’s assets, to be distributed to investors through a Fair Fund.
According to the SEC’s order, between June and October 2017, Unikrn raised approximately $31 million through its offering of the UnikoinGold (UKG) token. The order finds that Unikrn planned to use the offering proceeds to make more features available on the gaming platform and to develop additional applications for the UKG tokens.
Unikrn promised investors that it would facilitate a secondary trading market for the tokens and that its efforts to increase the usages for the UKG token would increase demand for and in turn, the value of, the tokens. Unikrn offered and sold UKG as investment contracts, which constituted securities, yet failed to register the offering or qualify for an exemption.
Unikrn was found to have violated the registration provisions of the federal securities laws. On top of the fine, Unikrn agreed to disable the UKG, publish notice of the order, and request removal of UKG from all digital asset trading platforms.
All interested persons are advised that they may obtain a copy of the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. Interested persons may also obtain a written copy of the Proposed Plan by submitting a written request to Michael Lim, United States Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-5876. All persons who desire to comment on the Proposed Plan may submit their comments, in writing, no later than 30 days from the date of the SEC’s Notice:
- to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090;
- by using the Commission’s Internet comment form (http://www.sec.gov/litigation/admin.shtml); or
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by sending an e-mail to rule-comments@sec.gov.
Comments submitted by email or via the Commission’s website should include “Administrative Proceeding File No. 3-20003” in the subject line. Comments received will be publicly available. Persons should submit only information they wish to make publicly available.
The Net Available Fair Fund is comprised of the $6.1 million in civil money penalties paid by the Respondent, plus interest and income earned thereon, less taxes, fees, and expenses. The Proposed Plan provides for the distribution of the Net Available Fair Fund to investors who purchased or acquired UKG between June 11, 2017 and November 5, 2017 and suffered a loss as calculated by the methodology used in the plan of allocation in the Proposed Plan.